We’ve all heard of the $7.8M underpayment scandal which recently engulfed celebrity chef George Colombaris, but is this just a symptom of the sheer complexity of workplace laws in Australia? After all, big organisations with dedicated HR departments are getting it wrong, so what chance does SMEs have of complying?
Just to name a few, apart from George Colombaris, Michael Hill, Caltex, Nandos, 7 Eleven, Chemist Warehouse and the ABC have been caught up in the problem and had to address prosecutions for breaching the Fair Work Act.
While the Fair Work Ombudsman (FWO) has been applauded in their pursuit of companies who are not paying their way, he has also suffered criticism in that the complexity of Australia’s industrial relations system is causing the problems, which the regulator is trying to avoid.
When you consider that large employers with an abundance of experience, resources and more than competent management, still can’t seem to get it right, what hope is there for the rest of us? Companies with more than 200 employees make up only 4% of businesses in Australia…how can we expect the other 96%, who don’t have that in-house expertise on HR issues, to pay their people correctly?
Well firstly, there’s the Fair Work Act, Modern Awards and Enterprise agreements, then add variable minimum wages, overtime, penalty rates, loadings and allowances. Some of these mistakes have been quite minor, but when that occurs over a long period with a large workforce, the figure starts stacking up.
While systematic underpayment is a serious issue and Australia’s workplace relations system is one of the most complex in the world, ignorance is not an excuse in the eyes of the FWO and honest errors or a lack of knowledge relating to entitlements will not alter the attitude of the FWO in the pursuit of businesses who come to their attention.
So…do we all just give up? Well no…but you have to properly address the issues…
- Investigate which of the Modern awards apply to your business.
- Calculate your employees minimum entitlements, including rates of pay, overtime, and penalty rates.
- Carefully consider minimum entitlements when embarking on an “all up” salary.
Finally, conduct regular reviews to ensure no-one “falls through the cracks.”